This post is written by Clementine Gallois and edited by Nguyen Thanh Nghiep 

On 22 October 2024, the Vietnamese government issued Decree 135/2024/ND-CP (“Decree 135“), a decree to encourage the development of self-produced and self-consumed (“SPSC”) rooftop solar power. It came into effect upon issuance[1].

Below is our discussion on the key aspects of licensing and compliance under Decree 135.

1. Scope 

First of all, what is “rooftop solar power”? It is electricity produced from photovoltaic panels, through a construction structure installed on the roof of a building, connected to electrical equipment.

Furthermore, Decree 135 defines the term “self-produced and self-consumed electricity” as electricity produced and consumed by the same legal entity or individual to bring benefits mainly to that organization or individual[2]. Put simply, it refers to power projects that are implemented by individuals or organisations with a view to provide power for the self-consumption of such individuals and organisations.

On the other hand, when electricity is directly traded between organisations, Decree 135 expressly provides that such trading will be carried out in accordance with the direct power purchase scheme regulations[3].

2. Licensing and Compliance

Licensing and notifications requirements

Notification requirements

Decree 135 requires developers of SPSC rooftop solar power systems that are non-grid-connected, or grid-connected but with an installed capacity of under 100kW to make certain notifications to the Department of Trade and Industry and to firefighting and prevention authorities[4].

Developers of SPSC rooftop solar power systems grid-connected with an installed capacity of 100kW or more but less than 1000kW should make the same notifications but also notify the relevant electricity units[5].

Development registration certificates

Decree 135 further states that developers of grid-connected SPSC rooftop solar power systems with an installed capacity of 1000kW or more and feed excess electricity to the national grid are required to obtain development registration certificates[6].

Electricity licenses

Decree 135 provides that developers of SPSC rooftop solar power systems are exempted from the requirements to procure an electricity license in the following cases[7]:

• The SPSC rooftop solar power system is not connected to the national power system; or
• A system for preventing electrical backfeeding to the national power system is installed; or
• The SPSC rooftop solar power system is installed on the rooftop of a residential building, grid-connected with a capacity of less than 100 kW.

Decree 135 furthermore specifies that developers of SPSC rooftop solar power systems that have an installed capacity of 1000kW or more and intend to sell excess electricity to the grid are required to obtain an electricity operation license[8].

It should be noted that Decree 135 does not clearly specify whether SPSC rooftop solar power systems grid connected with a capacity of less than 1000kW requires a license. However, article 3.2 of Circular 21/2020/TT-BCT on the procedure for issuance of electricity license provides that in such cases, the systems are exempted from electricity license requirements.

Provincial capacity allocation limits

The development of power projects, including grid-connected SPSC rooftop solar power systems, must comply with all relevant master plans. In particular, it must comply with the National Electricity Development Plan 2021 to 2030, with a vision to 2050. This master plan is commonly known as Power Development Plan 8 (“PDP8”).

The PDP8 includes a nationwide estimation of 2,600 MW of SPSC rooftop solar power systems to be developed until 2030 and allocates a specific quota to each province under its implementation plan.

Decree 135 states that SPSC rooftop solar power systems are free of any capacity limitations in the following cases[9]:

• The SPSC rooftop solar power system is not connected to the national power system; or
• A system for preventing electrical backfeeding to the national power system is installed; or
• The SPSC rooftop solar power system is installed on the rooftop of a residential building, grid-connected with a capacity of less than 100 kW.

Acceptance of construction and installation

Prior to the operation of SPSC, the developer must carry out the procedures for construction, electricity, fire safety and environment acceptance.

With regard to SPSC rooftop solar power with an installed capacity of 100kW and above, the electricity units shall cooperate in acceptance of the remote metering and data collection system, the local supervision and control system and connection of information with the supervision, control and collection system of the dispatch center.

Sale of excess electricity to the grid

Decree 135 provides that developers of grid-connected SPSC rooftop solar power systems are entitled to sell excess electricity generated to the national grid in the following instances[10]:

• When the installed capacity is less than 100kW and the SPSC rooftop solar power system is installed on the rooftop of a residential building; or
• When the SPSC rooftop solar power has adhered to the provincial capacity allocation set out under the PDP8 and its implementation plan.

The maximum amount of excess electricity that may be sold to the grid may not exceed 20% of the actual installed capacity of the relevant system[11].

The price of excess electricity fed back to the national power system shall be equal to the average market electricity price in the previous year announced by the power system and electricity market operator[12]. It may be noted that if energy prices spike in that year, leading to a general increase in market prices, the fairness of this arrangement for other solar power generators could, however, raise questions.

Systems installed on the rooftops of public buildings are prohibited from selling electricity to the grid[13].

• [1] Article 26 of Decree 135
• [2] Article 3.2 of Decree 135
• [3] Article 1 of Decree 135
• [4] Articles 6 & 7.5 of Decree 135
• [5] Article 7.6 of Decree 135
• [6] Article 9.3 of Decree 135
• [7] Article 8.1 of Decree 135
• [8] Article 8.2 of Decree 135
• [9] Article 8.1 of Decree 135
• [10] Article 8.7 of Decree 135
• [11] Article 8.7 of Decree 135
• [12] Article 8.7 of Decree 135
• [13] Article 8.7 of Decree 135